My Advice For Larry Page And Sergey Brin

If there is one thing I know, it’s that multi-billionaires love to get unsolicited advice from semi-anonymous bloggers.  With that in mind I thought I would take an opportunity to dole out some friendly advice to Larry Page and Sergey Brin.

First though, I have to confess that I don’t have a good track record when it comes to Google.

Back in early 2001, I got a call from my best friend who had just attend a tech conference in Silicon Valley.  He told me about a gentleman he sat next to who was an investor in what he described as a new search engine company.

Hearing this I laughed out loud. “What sort of idiot invests in a search engine company?” I asked incredulously.

The internet bubble had barely finished popping and many of the companies that survived looked as if they were in their death throes.  Tech companies specifically had seen their stock prices plummet and former darlings like Alta Vista were going out of business or being absorbed into larger entities.

I wondered how much money that poor sap would lose investing in this silly new company.

That “silly” new company of course was Google.  And the sap?  Well, that was a guy named John Doerr.

Suffice to say, I have gone from a Google skeptic, to a Google user, to a Google believer.  Though some may see them as a benevolent dictator, they make my life easier and more productive, and I enthusiastically use most of their products.

More importantly, I believe that Google believes that there is no industry they can’t dominate with a proprietary algorithm, an elegant user interface, and a boatload of the most talented programmer’s money can buy.  Their interest in companies like Uber, Nest, Waze, and a number of others in “non-core” industries proves that.

Thus I submit that the next industry in their crosshairs should be the residential real estate industry, crushing in the process the National Association of Realtors.  Why?  Because they are crushable.

Though everyone will tell you they know a really good real estate agent, as a group, there may not be another profession where compensation of individuals so outpaces their value; the financial services industry excepted.

The average commission for a real estate agent is between two and a half to three percent per transaction, and with two agents per sale – - one representing the seller, and one the buyer – - up to six percent of the transaction value is lost in their fees.  What’s worse is that their compensation scales with price – - they get twice the commission on a $500K sale than they do on a $250K sale, yet they perform the exact same amount of work.

There have been a number of companies that have tried to disintermediate realtors over the last few years, but none has had any real success.  The biggest obstacle has been the NAR, which has a powerful lobby in Washington and is hyper-vigilant in pushing legislation to keep their industry protected.  However, Google has the muscle in DC to take them on.

There are other obstacles related to the consumer, like the fact that buying a home is the biggest financial decision most people will make, and the fact that real estate expertise involves deep local knowledge.

But the biggest issue is that the home buying (and selling) process is intimately personal and emotional.  Consumers have very specifics wants and needs when it comes to purchasing a home, which sometimes they themselves don’t even understand, let alone have to capacity to convey to their agent.

If a client only wants to look at houses with large backyards, and their agent isn’t inquisitive enough – - and most aren’t – - they will never know if it is because they host an annual summer party, like to garden, or sunbathe nude.

But if a series of questions could discover that the buyers want a large back yard so their dogs could run, then maybe that opens up the possibility of purchasing a home with a smaller backyard, but that is close to a dog walk or public park.

There are hundreds of different types of criteria like this that people use to search for a home, and an infinite number of undiscovered motivations attached to those criteria.

Companies like Match.com and E-Harmony have shown that even the most personal and emotional consumer decision – - finding a marriage partner – - can be successfully navigated with a set of intuitive decision tree questions.  This is also known as an algorithm.

I believe Google can use their expertise at algorithms to find the best properties for the consumer, and their expertise at everything else to move them seamlessly and efficiently through the home buying process.  This efficiency would commoditize the business and the role of the realtor, destroying the current commission structure in the process.

I imagine that a move by Google into real estate would follow the Uber model; rolling out in select metro areas where it would be most likely to scale well.  I also imagine that they would not focus on the very low-end of the market (not enough profit), nor the very high-end of the market (too much hand holding).

Once Google Realty was established, the transaction process would be the perfect platform to bundle additional products such as mortgages, insurance, and home improvement.  Think of the consumer, who just saved tens of thousands of dollars by purchasing their home through Google; what do you think the chances are that they would spend some of that money on an integrated Google Home technology package based on Nest’s products?

The possibilities seem endless.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Even The Professionals Can Be Wrong

I’ve never been much of a hero worshiper.  The fanboy gene just doesn’t seem to be a part of my DNA.

I’ve eaten dinner an arm’s length away from Lindsay Lohan and the Hilton sisters.  I once gave Justin Timberlake directions to the men’s room.  I’ve even cracked wise in Ellen DeGeneres’ living room (she laughed but Anne Hecht stood there stone faced).  Despite the star power present, none of these encounters seemed extraordinary to me.

There are however some public figures whom I find “interesting.”  People who I wouldn’t mind picking their brain for a couple of hours over a few pints of fine craft beer.

Anthony Bourdain comes to mind.  Neil Peart of Rush definitely.  And in the world of finance, Carl Icahn and David Einhorn would be at the top of my list.

On the surface these two couldn’t seem more different.  Icahn is a street wise kid from Queens who is known for saying exactly what’s on his mind.  Einhorn on the other hand grew up in Wisconsin and exudes a quiet, confident, and reserved nature in interviews.

Yet both attended Ivy League schools – - Icahn at Princeton  and Einhorn at Cornell – - both run hedge funds, and both are wicked smart.  To me, Einhorn, out of all the current crop of “star” fund managers, seems most likely to have a long and profitable career like Icahn.

But even a pro like Einhorn can be wrong.

Einhorn has been shorting $GMCR ever since unveiling an hour-long presentation two years ago that criticized the company and what he believes is their fraudulent accounting.

Even as recently as last November he reiterated his position on CNBC’s Fast Money.

Paraphrasing Einhorn he said…

There are many ways to win short on this stock.

I have questions about their numbers and how they have been disclosed.

The company has lost the patent on K-cups. 

The have earned monopoly type margins in the past, but as more competitors come in, price will fall, along with margins.

The day of that interview $GMCR closed at $70.57 per share.  Yesterday, after $KO announced that they were taking a 10% stake in the company, the stock soared 45% in after-hours trading to $117.33 per share.

Though it’s not clear if Einhorn still has his short position or if he had hedged it, I think it is safe to say that he was wrong.  And really the only type of wrong that matters, price action wrong.

David Einhorn will no doubt survive this setback and live to short another day, but this is a good reminder to those of us that don’t run multi-billion dollar hedge funds, that, in the words of my friend Brian Shannon, price is the only thing that pays.  No matter what we think the script is or how it might play out, we always have to respect and obey price action, as it is never wrong.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

The “There Is No Way” Market

Unless you have been living under a rock, you know that the game has changed this time.

There is something a bit more ominous about this latest market sell-off.  Nothing concrete yet — no definitive chart or stat you can point to — that tells us this might be more than the standard 4-8% mini-correction we have experienced numerous times over the last few years.

But something in the tone and tenor seems different.  Sometimes when the indexes are down big, a closer look still finds winners among the leaders.  All the former leaders have been taken out to the woodshed this time.  The losses seem broader, more across the board.  The only stock showing strength is $MSFT, which is cold comfort.

A prized thoroughbred naturally has different types of gaits; walk, trot, canter, and gallop.  They may not be discernible to the crowd, but the trainer who handles him daily with love and respect can distinguish them, and can tell when something is amiss.  He knows that pushing his horse when his underlying health is suspect can have dangerous consequences.  Seasoned professionals know the same thing about the markets.

For some reason, markets like the one we are in right now seem to attract soft money, not repel it. Investors and traders who should be doing nothing more than sitting on their hands and re-reading the Market Wizards series are rushing to “take advantage of the volatility.”  Meanwhile, smart money is standing aside, waiting for more information, a clearer picture, and a better diagnosis of the market’s health.

Regardless of whether this is “the big one” or not, we have definitely entered into a dangerous type of market, what I like to call a “There is no way” type of market.  It’s hallmark is the cry of “there is no way,” which comes from those with some, but not enough, understanding about how markets work.

There is no way it can go lower.

There is no way it won’t bounce here.

There is no way $AAPL won’t come back.

There is no way I can sit on the sidelines while this is going on.

There is no way I am wrong on this stock.

There is no way I went full margin on that position.

There is no way I could have lost all my money.

There is no way I am going back to working as a used car salesman.

The irony of the “there is no way” market is that, “Yes!” there is a way.  It is precisely when you start believing that there are things the market just won’t do, that it in fact does them.

Markets like this are the exact type in which you have to put your biases away and keep your mind open to what can happen.  You also need to alter your strategy.

If you are a trader, resist the urge to catch every bounce.  Trade less.   Trade smaller.  Trade smarter.

If you are an investor, pare down your losers and raise cash.  Find the stocks that hold up best during this turmoil and put them on a list.  That is your shopping list, the one you will use to buy from when things settle down and the smoke clears.  Those stocks will be the winners in the next move up.

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Best Of The StockTwits Network 1-18-13

Give it up for the 16 best posts of the past week from The StockTwits Blog Network…..plus one from your’s truly.

Breaking down the mechanics of a “dip” buy (1nvestor)

On bubbles.  What they are, how they end, and the futility of trying to identify them contemporaneously (Abnormal Returns)

JC shows us a chart he loves in the precious metal space, and it’s not gold or silver  (All Star Charts)

Fear, and about ten other things are keeping you from meaningful change (Altucher Confidential)

Looking at ways to prevent over trading (bclund)

Perhaps one of the best things I’ve ever read about how to be a successful fundamental investor (Crossing Wall Street)

You think gold is in trouble?  Wait til you hear what is next for silver (Dragonfly Capital)

Lydia has a thesis that Africa may be where the next bull market starts.  $DIS might be thinking the same thing (FaithMightFX)

This post is a great example of why I wish the folks at High Chart Patterns blogged more often (HCPG)

Joe deconstructs his week in the market which included talking numerous traders off the ledge (Joe Fahmy)

There are gold bugs, and then there are insanely delusional psychopathic gold bugs (Kid Dynamite’s World)

Jeff breaks down the FCC’s net neutrality decision (Points and Figures)

Will a new type of cigarette that is only semi-deadly save $PM (Sizemore Insights)

Josh schools Henry Blodget on why there is no crash on the horizon (The Reformed Broker)

So, where IS gold going? (The Armo Trader)

Joe on the arms race going on right now in the market (Upside Trader)

Some like their trading tips “hard.”  Some like them “soft.”  Frank has 10 soft ones (Zor Trades)

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

How To Avoid Over Trading During A Losing Streak

I tend to look at the world through market colored glasses.

If I have to wait in a ridiculously long line at the grocery store because there are only two registers open, that’s an order imbalance to me.  Too many buyers and not enough sellers.

Recently I took a much despised transcontinental flight.  The day of my flight there was one first-class seat open, costing an upgrade fee of seven hundred and fifty dollars.  When I boarded the plane it was still available — three fifty I estimated as long as the cabin door remained open.  Forty-five minutes into the flight it was down to a buck ten.

A polite request to the flight attendant and a smile, and it was mine for eight dollars.  It hit my target and I hit the bid.

So when I got an agitated call from a good friend of mine last week regarding a domestic matter, I naturally framed it in terms I could related to best.

My friend and his wife both make a good living, but by the end of each month they always seemed to be in the red.  The root of the problem appeared to lay at his wife’s feet, as she seemed to be the one draining the bank account on a regular basis.

Note: This is not meant to be some sort of gender biased comment; it’s just happens to be how the facts lay out in this case.

In order to find some sort of mutually agreed upon solution, he and his wife decided that they would not make any purchases over one hundred dollars without checking with each other.  But despite the plan, by the end of the next month, they had still gone negative.

A quick look at their monthly statement told the story.  His wife had indeed stuck to the rules of their agreement; but not the spirit.

There were almost fifty individual charges on her debit card ranging from forty-five to ninety-five dollars a piece.

What I saw was over trading.  And possibly a stint in couples therapy.

I have talked at length on this blog about the importance of a methodology and using position sizing to define your risk, but you can still blow your account out if you use “respecting your max loss rules” as a rationalization for over trading when you are running bad.

There are a couple of ways you can avoid that.

One option is to limit the number of trades you make in a given time period.  For a day trader that might be two to five trades a day. For a swing trader that might be six to ten trades per month.  

A second option is to set a maximum cumulative dollar loss for your account in a given time period, regardless of number of trades.

But no matter which method you use, the important idea is that it is based on tying individual position losses to your overall account equity.  That way you have created an objective criteria to let you know when you are over doing it and need to dial things back.

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

What A Venture Capitalist Can Teach You About The Stock Market

Fred Wilson is a venture capitalist.

And despite his decidedly generic name, he is far from a generic VC.  Perhaps “premiere VC of his generation” is a more apt description.

Through his firm, Union Square Ventures, Wilson has been an early stage investor in a wide range of companies, including Zynga, Tumblr, Foursquare, Coinbase, Lending Club, Kickstarter, Etsy, and a little thing called Twitter.

Recently he gave a presentation at LeWeb tech conference in Paris, where the moderator asked if he was interested in making investments in more extreme type ventures, a la Elon Musk.  He answered as follows;

Fred Wilson: The kinds of things that Elon does, the electric planes, and the Hyperloop, and the SpaceX, and the Tesla; those aren’t things that that interest me, and those aren’t things that interest our firm.  They are great things, and I wish that more people would do those things….

Moderator: Why not? Too far away?

Fred Wilson: (shaking his head) We don’t have a view, we don’t think we have a unique view – - and point of view – - about those things.  And you know, the venture capital business is very competitive, like the business of entrepreneurship is a very competitive business, and the only way you win is by knowing what you are good at and what you are not good at, and sticking to what you are good at.  That is my feeling anyway.

For market participants there is a very important lesson in that last statement.

Successful VC’s live or die on their deal flow.  Because they only want to invest in the deals with the best opportunity for a successful exit, and because those deals are few and far between, they need to sort through a lot of opportunities in order to find the winners.

Wilson probably sees more deals than any other VC out there, but by his own admission, he only invests in one, or maybe two, each year, and only in areas he has a unique view.  That unique view gives him an edge over his competition and has no doubt contributed to his record of success.

Let me put that through the “VC to investor” translator.

Deal flow in the world of investing emanates from different equity classes, sectors, and instruments.   Every day that flow – - those opportunities – - present themselves in each of these areas, and your job is to sift through them, casting aside those that don’t offer a favorable risk/reward, choosing to act on only those with the best chance of success AND that are in your area of expertise.

That Wilson, with all his success, only stays in areas he knows he is good at, is a lesson in patience, focus, and not letting ego into the mix.  And understanding how his statement “knowing what you are good at and what you are not good at, and sticking to what you are good at,” relates to the markets is the key to your success.

 My Talk At LeWeb Yesterday (A VC)

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

The Most Successful Investor Of The 90′s Says There Is No Market Bubble

Dan Zanger did the unbelievable.

He turned 18K into $42 million, in under two years, during the height of the 90′s bubble market.  He doesn’t think this market is like that one….yet.

“There is certainly some frothy behavior, with many stocks overpriced, while others are priced to perfection, ” says Zanger. “However, this market is far from the ‘bubble’ behavior that we saw in 1998-2000.”

Zanger knows what he’s talking about, having cut his teeth in the markets, with various degrees of success, in the early ’90s. But it wasn’t until he became a student of William O’Neil’s CAN SLIM method, which looks for stocks with strong fundamentals and technically significant chart patterns, that he catapulted to the rarefied heights of the investing world.

Beginning in June of 1998, Zanger spent 18 months turning $10,775 into $18 million — an unofficial world record for stock market investing — which translates into a mind-blowing 164,000 percent return (and yes, he has the tax returns to prove it).  Just five months later, as the bubble was getting ready to burst, that same account had grown to a massive $42 million dollars, a feat that Trader Monthly ranked among its 20 Greatest Trades of All Time.

Click the link below to read the rest of the story.

Is the Stock Market Really About to Pop?  Why One “Bubble” Legend Says No! (DailyFinance)

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

Intro To Trading Webinar For All StockTwits Members

As a “Thank You” to all of you who recently followed me on StockTwits, I am hosting an open Q&A this Friday, the 3rd, at 9:00am PST.  Anyone can attend but the real target audience is those of you who are new to StockTwits and new to the markets.  During this webinar I will answer any and all questions, to the best of my ability, about trading.  In addition, everyone who attends will get a free copy of my book Trading: The Best of The Best – Top Trading Tips For Our Times, which contains over 200 market tips from over 60 active traders and investors.

And here are the most important things to remember for this webinar; there are NO dumb questions, there are NO questions too basic to ask, and NOBODY should be too intimidated to participate.  So just sign up with the link below, and I will see you then.

*Note: The webinar is limited to 100 people so please only sign up if you plan to attend*

Click here to sign up for this free webinar.

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

You Can Lead The Investing Public To The Market, But…….

Last week I kicked off a new writing gig over at AOL’s DailyFinance.  It will be different from what I do here on the blog in the sense that I’ll be writing less about trading and more about the markets, personal finance, and business in general.  I’m very grateful to have to chance to write for a broader audience, but already I have been reminded about how the individual investor can be their own worst enemy.

Case in point; a reader by the name of “Valerie,” who decided to comment on my piece “How to Improve Your Market Returns in 2014″.

The piece is about how a good market service can analyze thousands of stocks and distill them down to a manageable list of candidates for you to consider.  I asserted that subscribing to such a service was an efficient and cost-effective way to use  technology to your investing benefit.  I went to great pains not to suggest any specific services, nor to paint them as a panacea for investors, but just one of the tools they could add to their arsenal.  I also warned that there are scammers in this field and that you should always go with a service that offers a free trial first to make sure they are legit and that they fit your investing style.

So here is how Valerie weighed in on the subject (emphasis is mine):

Individual investors should be very VERY wary of anyone who claims to be able to “predict market moves”. The best minds in the investment field (who manage multi-billion dollar funds) can’t do this, consistently, and neither can these so-called “services” claiming to be able to pick the next big stock winners.

One aspect that the writer of this article conveniently glosses over is that paying 99 bucks a month for this questionable “advice” is almost 1200 dollars a year, PLUS the cost of trading stocks added to that. It’s hard to generate profits, if you are shelling out that much money for expenses. Potential taxes on all that trading should also be an important consideration, and that isn’t even mentioned in the article.

And what is going on with the writer’s belief that an internet chat room is the best place to get investment advice?? It isn’t. “Interacting with other traders” in chat rooms isn’t a good way to improve your investment returns. They will brag, endlessly, about their few big winners, but they will NEVER tell you about their many big losers.

The best advice?? If someone wants you to pay for their “stock picking service”, get a firm hold on your wallet and run. (Want to double your money quickly?? Fold it over and tuck it back in your wallet. LOL)

If you absolutely can’t resist the lure and excitement of stock trading, set aside just 10% of your investment funds for this as “fun money”. For the other 90% of your portfolio, stick with the proven long-term stock winners. Those “dull and boring” blue chips aren’t exciting to brag about to your friends, but their dividends and appreciating stock prices will make you rich over a period of time.

After reading this, I made a rookie mistake and decided to get into a good ole’ fashioned “flame war,” something I haven’t done since the Money Talk BB’s on Prodigy back in the early 90′s:

Hi Valerie,

The only problem with your argument is that you have absolutely no idea what you are talking about.

Nothing you say has anything to do with the ideas in the article. It is not about “predicting market moves” or a “stock picking service,” it is about streamlining the process of finding good stock candidates for a fee.

How much is your time worth? Is it worth $0.68 per hour? Because if you are paying $99.00/mo for a service where they spend 40+ hours a week watching and analyzing the market, then that is what it costs. And for that minimal fee, you get the 8,000+ stocks in the market boiled down to a list of 5-10 that you can consider. That to me is the most efficient use of money vs. time that I can think of for an investor.

And I even went as far to indicate that “yes” there can be some shady operators out there, but that most legitimate ones offer a free trial.

So, you could try a service for free, see if it works for you, and if they know what they are doing, and if so, subscribe to them for pennies a day to make your life easier….

OR…..

You could just dismiss the idea completely.

You made your choice.

Thanks for reading.

-B

Valerie then came back with a seven paragraph, five-hundred word retort, which I will not be so cruel as to burden you with here, but suffice to say, I quickly remembered why you don’t get into arguments with anonymous people on the internet — because they actually have the time to write seven paragraph, five-hundred word retorts.

Still, I can’t say that I wasn’t frustrated.  I felt like I was trying to introduce punk rock in the 70′s, or rap in the 80′s, to someone who felt musical perfection had already been achieved in the form of Foghat.  And no matter how much I tried to show them something different, cutting edge, and thought-provoking, they just wanted more of the same — double-live albums filled with twenty-minute guitar solos.

Interacting in the financial blogosphere and on StockTwits as much as I do, it is easy to forget that I’m living in a bubble in terms of market knowledge, and to those on the outside of the bubble my ideas and insights, no matter how normative I think they are, seem like the ramblings of a naive lunatic at best; and a financial charlatan at worst.

That makes my job over at DailyFinance more difficult, but also more challenging, which I like.

Check out my first two pieces for DF, The Man Who Saves CEO’s Billions in Taxes  &  How to Improve Your Market Returns in 2014 and let me know how I am doing.

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.

The New Rules Of StockTwits: 2014 Version

Way back in 1975, I remember a conversation I had with Howard Lindzon and Phil Pearlman, or H-Lindz and Psquared, as I affectionately called them at the time.  We were all sitting around, stroking our long, long locks of shiny, full hair, discussing the merits of various conditioners, when Howard first suggested the idea of ABBATwits, a community dedicated to the Scandinavian pop Gods who were tearing up the charts.

“H-Lindz,” I said.  “Pop music is too fickle.  You need to create something with lasting value.  Something that will stand the test of time.”  And that was the genesis of StockTwits.

Fast forward to (almost) 2014.  Now I may not be one of the Big Dogs like Greg Harmon (38,211 followers), Brian Shannon (with 38,039 followers), or some unnamed dick from the panhandle state with 38,026 followers, but I think I have been around long enough to throw some new rules out for 2014. So here they are.

Avatar Protocol

Look, I have covered this issue ad nauseam, most specifically in my post The 5 Worst Avatars For A Trader To Have, but for those of you who haven’t read that Keats-like post, here is the gist of it…

Load up a goddamn picture!  The generic StockTwits logo is not cool.  Nor is it dope, fly, jake, or the bees knees.  We all want to engage with you, but staying anonymous is not mysterious or deep; it’s just annoying.  Show us something about who you are as a person, or in social media terms, as a “brand.” Fill out your bio too.  Skip the “serial entrepreneur,” “market crusher,” and “student of the market” crap while you are at it.  Just be honest, tell us a bit about yourself and you will be welcomed into the fold like one of the hot Kardashians.

Cool The Angry Young Man Stance

Sometimes I marvel at the vitriol that goes back and forth between members on such globally important issues as “Is $AAPL a buy or a sell?”  You would think that they were arguing about whose diabetic child should get the last vial of insulin in a post-apocalyptic, zombie infested world.  Just chill.  Or better yet, cold-chill.  These are just stocks folks.  It’s okay to have an opinion, but not cool to treat someone with an opinion different from yours like they are Hitler.  Or Stalin.  Or Bieber.  Let’s all just try to get along shall we?

Chicken Littles

News Flash.  The S&P is not going to zero.  Gold is not your savior.  Roubini, Faber, Zero Hedge, and company are wrong.  Why don’t we say it Electric Company style….

WR……ONG………WRONG!    D…..ICKS……DICKS!  LO…..SERS……LOSERS!

Let’s say, for argument’s sake, that tomorrow space aliens come down to Earth and blast the NYSE and all world stock exchanges with their super-blaster rays, and the markets crash. After all the smoke clears, our new extraterrestrial masters will review the recent timeline and determine that the perma-bears and their ilk missed out on one of the fattest moves in market history.

So, barring any Independence Day shit happening, just give the “sky is falling” jag a rest.

Perpetual Crushers

You are crushing the markets.  You are in before every move.  You bought the bottom, shorted the top, and re-bought the bottom.

No you didn’t.  You didn’t even come close.  The Lord-God-Shiva Paul Tudor Jones himself only claims to catch 50 or 60 percent of a move at best, so cut the crap.

Let’s make a deal? Post every time you get stopped out for a loss along with every time you get a “four bagger.”  If that ratio is at least 5:1 then we will believe you.

I want something, and then something else, and them something else, for nothing

Hey, I was just thinking about something.   How much did it cost you to join StockTwits?  What?  How much? Oh, nothing…..you mean nada, zip, zilch, bubkis, the big donught?

So why the fuck do you think you are entitled to berate, challenge, quiz, query, berate again, and castigate people who are giving their time, knowledge, and expertise for free?

Play nice, and you will find that StockTwits and it’s members are the most valuable asset you will ever find regarding the markets.  But be a dick in tone or temperament, and you will quickly get shut down.

So, there you have it.  My rules for 2014.  Do they seem bitter?  Or course they do, and of course I have issues, but they are hard-won issues from years in the trenches.  I, and most of the recommended people on StockTwits will be more than happy to help you out in any way we can in the coming year. Just be cool and remember that behind the avatars are real people, who if treated with respect, will return that respect to you in spades.

Brilliant stuff like this rains down like..well, rain, on my stream during the week.  If you want to get wet, follow me on Twitter and StockTwits.  You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.  All proceeds go to fight pediatric brain cancer.

Brilliant stuff like this rains down like..well, rain, on my stream during the week. If you want to get wet, follow me on Twitter and StockTwits. You can also pick up my book Trading – The Best of the Best: Top Trading Tips For Our Times by clicking here.